Jakarta - Shoppers in parts of Indonesia rushed to snap up food and even electronic goods in a buying spree spurred by the country's deepening economic crisis and political uncertainty, economists and traders said.
Rumours of social unrest swirled in Jakarta as the stock market plunged more than 18 percent at one stage on rumours that President Suharto would not seek re-election in March. The market closed down 11.95 percent.
Some political analysts said the government appeared stunned by the extent of the nation's economic crisis. There was no immediate comment available on the accuracy of the Suharto rumours.
Taco Bottema, economist with the United Nations' Economic and Social Commission for Asia and the Pacific (ESCAP) said food prices have increased by 25 percent in just one week.
"At the moment, it's got the makings of a ... strong crisis. We haven't seen the worst of it yet," he said.
People began cramming supermarkets and other food outlets in a bid to stock up, with some being turned away empty handed.
"My wife went to the supermarket and was told that none of the goods there were for sale," one businessman in the North Sumatran city of Medan said by telephone.
A Jakarta resident said a supermarket in an up-scale area in the capital was crowded with people shopping for food.
In the midst of the scramble, one Westerner -- probably paid in high-value dollars -- was seen in a supermarket with two trolley loads of electronic goods, including digital video players, photocopiers and music systems.
Some analysts liken the present situation to the mid-1960s as Suharto came to power, when the country was nearly bankrupt, food shortages were rampant and hyperinflation was battering an economy largely dependent on oil and agriculture.
Over the past 30 years under Suharto, the country emerged as one of the most promising economies in Asia.
"My gut feeling is that we will ride it out," said economist H.S. Dillon of the private Centre for Agricultural Policy Studies. "(But) the situation is bad."
The Indonesian rupiah has shed more than 70 percent of its value against the U.S. dollar since July after the region's financial crisis first broke in Thailand.
An El Nino-induced drought that parched most parts of the archipelago late last year, pushing back the harvest of the main rice crop by about two months, has exacerbated the situation.
Indonesia sought assistance from the International Monetary Fund (IMF), which orchestrated a multi- billion dollar bailout package in return for economic reforms.
"I didn't think the IMF package would have a lot of impact because that was basically public-sector orientated while the problem was mostly private sector," Bottema said.
He expected a shakeout in the animal feed sector, which was struggling because of a decline in meat demand coupled with high import costs brought on by the rupiah's fall.
"What you see now in the food sector is a real yo-yo situation. Animal feed prices are going up, forcing poultry producers to stop production. But egg prices have gone up 150 percent. It's not a matter of logic anymore," he said.
Hariyanto Salim of the Ramayana Lestari Sentosa, which operates department stores and supermarkets, said food prices had increased by an average 10-20 percent in Jakarta.
Overall inflation was 11.2 percent in the 1997 calendar year.
"Sales have increased by about 30 percent, which is relatively normal in this time," Hariyanto said, referring to the period ahead of the Moslem Eid al-Fitr festival in late January.
"The fear is that producers might start hoarding supplies. This has not happened yet, but the possibility is there."
Industry sources said rice sales have been brisk, but added that the government had contracted to import 1.5 million tonnes of rice, mostly from Thailand. The staple is expected to arrive in Indonesia by early February.
"It seems to be a race against time," one foreign commodity expert said. "Supply is tight. Stocks are down. They will need to bring in the rice fast. The word from the top is apparently that cost is not a factor."
Traders said bulk cooking oil prices had risen to 3,300 rupiah (36 U.S. cents) per kg from about 2,000 rupiah (22 cents) in early November on the back of the rupiah's fall and tight supply due to increased exports over the past two months.
The government has imposed an export ban on cooking oil between January and March in a bid to control domestic prices, but the move has yet to kick in.
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